BCE buyers finalize funding

TORONTO (Reuters) - Announcing what it said were "essential
milestones" allowing the world's largest leveraged buyout to go
ahead, BCE Inc BCE.TOBCE.N said on Friday that its buyers
had finalized funding and were sticking to their C$34.8-billion
($34.1 billion) purchase price.

In an announcement that was in stark contract to news of
buyouts that have crumbled in the United States, the Canadian
telecom giant said it expected its going-private deal to close
by December 11.

BCE shares jumped 13 percent to C$39.64 on the Toronto
Stock Exchange, reflecting investor relief that the deal would
close at the original price of C$42.75 per share. The closing
will be some six months later than previously targeted.

"It's been a tough market for financing in the credit
markets," said MacDougall, MacDougall & MacTier analyst Troy
Crandall. "It was quite impressive that they did get the
financing put together as quickly as they did."

BCE, traditionally known for steady dividend payouts, said
it will not pay dividends on its common shares before the deal
closes, although it will continue to pay dividends on its
preferred shares.

That follows on from an announcement on Monday that BCE was
skipping its second-quarter dividend, worth about C$294
million, as it works to complete the deal.

The reverse break fee payable by the buyers has increased
to C$1.2 billion from C$1 billion.

"Since the dividend has been effectively canceled, it is
likely that the...dividend payments between now and close
(worth between C$588-C$882 million) have been offered as a
concession for the banks to complete the deal," National Bank
Financial analyst Greg MacDonald wrote in a note to clients.
Continued...